1. Posting Journal Entries to General Ledger Accounts Making Accounting Relevant Every business completes business transactions daily. Think about the various areas of a business, such as the different departments in a department store or a home supply store. Making Accounting Relevant Every business completes business transactions daily. Think about the various areas of a business, such as the different departments in a department store or a home supply store.

2. Section 1The General Ledger What You’ll Learn  The purpose of the general ledger.  How to open accounts in the general ledger. What You’ll Learn  The purpose of the general ledger.  How to open accounts in the general ledger.

3. Why It’s Important You examine the ledger to review how business transactions affect each account. Why It’s Important You examine the ledger to review how business transactions affect each account. Section 1The General Ledger (con’t.) Key Terms  general ledger  ledger account form Key Terms  general ledger  ledger account form

4. Setting Up the General Ledger In a manual accounting system, the accounts used by a business are kept on separate pages or cards. These pages or cards are kept together in a book or file called a general ledger. Setting Up the General Ledger In a manual accounting system, the accounts used by a business are kept on separate pages or cards. These pages or cards are kept together in a book or file called a general ledger. Section 1The General Ledger (con’t.)

5. The Four-Column Ledger Account Form Section 1The General Ledger (con’t.)

6. Opening an Account with a Zero Balance Section 1The General Ledger (con’t.) (1)Write the account name at the top of the ledger account form. 1 1 2 2 (2)Write the account number on the ledger account form.

7. Opening an Account with a Balance Section 1The General Ledger (con’t.) (1)Write the account name at the top of the ledger account form. (2)Write the account number on the ledger account form.

8. Opening an Account with a Balance (con’t.) Section 1The General Ledger (con’t.) (3)Enter the complete date (year, month, and day) in the date column. (4)Write the word “Balance” in the Description column.

9. Opening an Account with a Balance (con’t.) Section 1The General Ledger (con’t.) (5)Place a check mark ( ) in the Posting Reference column to show the amount entered on this line is not being posted from a journal. (6)Enter the balance in the appropriate balance column of the ledger account form.

10. Section 2The Posting Process What You’ll Learn  The purpose and importance of posting.  How often a business posts transactions.  The six steps in the posting process.  How to compute an account balance.  How to show an account with a zero balance. What You’ll Learn  The purpose and importance of posting.  How often a business posts transactions.  The six steps in the posting process.  How to compute an account balance.  How to show an account with a zero balance.

11. Why It’s Important Posting brings the records of the business up-to-date. If a business did not post its transactions, the balances in ledger accounts would not be current. Why It’s Important Posting brings the records of the business up-to-date. If a business did not post its transactions, the balances in ledger accounts would not be current. Section 2The Posting Process (con’t.) Key Terms  posting Key Terms  posting

12. The Fourth Step in the Accounting Cycle: Posting To provide a clear picture of how each account is affected by a business transaction, the information in a journal entry is posted to the general ledger accounts. The Fourth Step in the Accounting Cycle: Posting To provide a clear picture of how each account is affected by a business transaction, the information in a journal entry is posted to the general ledger accounts. Section 2The Posting Process (con’t.) General Journal Utilities Repairs Revenue Salaries

13. Posting from the General Journal to Ledger Accounts Section 2The Posting Process (con’t.)

14. Computing a New Account Balance Section 2The Posting Process (con’t.)  Debit amounts are added together.  Credit amounts are added together.  Debit and credit amounts are subtracted.

15. Section 3Preparing a Trial Balance What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors. What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors.

16. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Section 3Preparing a Trial Balance (con’t.) Key Terms  proving the ledger  trial balance  transposition error Key Terms  proving the ledger  trial balance  transposition error  slide error  correcting entry  slide error  correcting entry

17. The Fifth Step in the Accounting Cycle: The Trial Balance Section 3Preparing a Trial Balance (con’t.)  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.

18. The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.) Section 3Preparing a Trial Balance (con’t.)